address of stored copyrighted material, and (2) take content down when copyright
owners identify the infringing sources in otherwise compliant notices.^2742The court held that there was no genuine dispute that MP3tunes did not qualify for safe harbor
protection for songs stored in users’ lockers that were sideloaded from the unauthorized web
sites identified in takedown notices.^2743
The court then turned to the question whether MP3tunes was disqualified from the
Section 512(c) safe harbor by virtue of having actual or “red flag” knowledge of infringement
with respect to which it failed to act. The court noted that the knowledge provisions are designed
to deny safe harbor protection to Internet service providers operating or linking to pirate sites
whose illegal purpose is obvious to a reasonable person, but general awareness of rampant
infringement is not enough to disqualify a service provider of protection. EMI argued that
MP3tunes had red flag knowledge in part because its executives sideloaded songs by popular
artists from obviously infringing sites like rapidshare.com, fileden.com and filefactory.com. The
court noted, however, that those sites do not use words like “pirate” or “bootleg” or other slang
to indicate their illegal purpose and are not otherwise clearly infringing. Nor did the DMCA
place the burden of investigation on MP3tunes to determine whether those sites were not
authorized to distribute EMI’s copyrighted works.^2744 Said the court, “Put another way, if
investigation is required to determine whether material is infringing, then those facts and
circumstances are not ‘red flags.’”^2745 Because EMI itself regularly distributed work on the
Internet for free, MP3tunes’ executives and other Internet users had no way of knowing for sure
whether free songs on the Internet were unauthorized. Accordingly, there was no genuine issue
that MP3tunes did not have specific red flag knowledge with respect to any particular link on
Sideload.com, other than the specific URLs noticed by the plaintiffs.^2746
The court also ruled that MP3tunes was not disqualified from the safe harbors by virtue
of having control and a financial benefit over the infringing activity. As to direct benefit, while
Sideload.com could be used to draw users to MP3tunes.com and drive sales of pay lockers, it had
noninfringing uses and MP3tunes did not promote infringement. Any link between infringing
activity and a direct benefit to MP3tunes was attenuated because sideloaded songs were stored
free of charge and infringing and noninfringing users of Sideload.com paid precisely the same or
nothing at all for locker services. Nor did MP3tunes have control over its users’ activity because
its users alone chose the web sites they linked to Sideload.com and the songs they sideloaded and
stored in their lockers.^2747 In sum, the court concluded, “there is no genuine dispute that
(^2742) Id. at 642-43. The court rejected MP3tunes concern for liability if it removed material from its users’ lockers,
noting that MP3tunes’ Terms of Use clearly authorized it to block a user’s access to material in lockers. The
court also noted the immunity afforded by the DMCA under Section 512(g) to service providers who remove
infringing material. Id. at 643.
(^2743) Id.
(^2744) Id. at 643-44.
(^2745) Id. at 644.
(^2746) Id. at 644-45.
(^2747) Id. at 645.